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Shell's proposed ethane cracker in Pennsylvania is facing several challenges apart from securing feedstock supplies, according to this analysis. One issue is the availability of "any suitable LPG storage in the vicinity of their proposed site," said Rusty Braziel of RBN Energy. "If you are a producer," said Peter Fasullo of consulting firm EnVantage, "you want to make sure that you will not have to throttle back gas production because the ethane can't be consumed by Shell's plant when it is down. If Shell can find a way to not disrupt the producer, then the project has jumped one major hurdle."

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Royal Dutch Shell's planned ethane cracker will help increase economic cooperation and mutual benefit among Pennsylvania, Ohio and West Virginia, said experts at a recent conference. "In the long-term horizon, there's enough ethane supply in this country for all the crackers that have been planned or proposed and for the exports that are going to be happening," said Kevin Swift, the American Chemistry Council's chief economist.

West Virginia may still secure an ethane cracker despite Shell's recent decision to explore a potential site in Pennsylvania, said West Virginia Commerce Secretary Keith Burdette. "We have the building blocks, a trained chemical workforce, abundant supplies of ethane-rich natural gas, and a robust infrastructure. Just from an operational picture, a world class cracker will likely require an investment from $3 billion to $5 billion," Burdette added.

Royal Dutch Shell's proposed ethane cracker in Pennsylvania is only one of about 30 chemical facilities planned for the U.S. in the next few years, which could lead to 200,000 jobs, said American Chemistry Council President and CEO Cal Dooley. Among such projects are Dow Chemical's two Gulf Coast-area plants. "The affordability of U.S. natural gas allowed us to choose to build these assets near home," said Dow executive Brian Ames.

Shell's study of Pennsylvania for a possible ethane cracker will mean evaluating the viability of cost, ethane storage, location, building polyethylene and monoethylene glycol units, and whether to take on a partner, according to this article. Analysts see potential for other companies to build crackers as well. "What I'm seeing is we have a very, very viable petrochemical industry that is just taking off in this country," said En*Vantage's Peter Fasullo. "It is going to be quite competitive for the feedstock."

Water access needs for Shell's proposed ethane cracker make Ohio and Pennsylvania the leading candidates, according to Terry Fleming, executive director of the Ohio Petroleum Council. Officials from Pennsylvania and West Virginia have been publicly stating their case this week ahead of Shell's announcement, which could come next month.